Stephanie Sullivan - Chief Legal Officer and General Counsel Sam Tillinghast - Co-Chief Executive Officers Chris Flynn - Co-Chief Executive Officers Terry Olson - Chief Operating Officer and CFO.

Greg Mason - KBW Doug Mewhirter - SunTrust Chris York - JMP Securities Jonathan Bock - Wells Fargo Securities.

Good morning. And welcome to the THL Credit's Earnings Conference Call for its Fourth Fiscal Quarter and Year -- Full Year 2014 Results. It is my pleasure to turn the call over to Ms. Stephanie Sullivan, Chief Legal Officer and General Counsel of THL Credit. Ms. Sullivan, you may begin..

Thank you, Operator. Good morning and thank you for joining us. With me today are Sam Tillinghast and Chris Flynn, our Co-Chief Executive Officers; and Terry Olson, our Chief Operating Officer and Chief Financial Officer.

Before we begin, please note that statements made on this call may constitute forward-looking statements within the meaning of the Securities Act of 1933 as amended.

Such statements reflect various assumptions by THL Credit concerning anticipated results are not guarantees of future performance and are subject to known and unknown uncertainties and other factors that could cause actual results to differ materially from such statements.

The uncertainties and other factors are, in some ways, beyond management's control, including the factors described from time to time in our filings with the Securities and Exchange Commission.

Although, we believe that the assumptions on which any forward-looking statements are based are reasonable, any of those assumptions could prove to be inaccurate, and as a result, forward-looking statements based on those assumptions also could be incorrect. You should not place undue reliance on these forward-looking statements.

THL Credit undertakes no duty to update any forward-looking statements made herein. All forward-looking statements speak only as of the date of this call. A webcast replay of this call will be available until March 18, 2015, starting approximately 2 hours after we conclude this morning.

To access the replay, please visit our website at www.thlcredit.com. With that, I'll turn the call over to Sam..

Thank you, Stephanie, and good morning, everyone. Thanks for joining this morning's call covering the results of THL Credit's fourth quarter and year ended December 31, 2014.

Our earnings announcement and 10-K were released yesterday afternoon, copies of which can be found on our website, along with the Q4 Investor Presentation that we will refer to during this call. I will be providing an overview of our quarterly financial performance and our investment pace.

Additionally, I’ll offer some thoughts on the market and talk briefly on the energy investments in our portfolio and our underwriting process in that space. Chris will be discussing new investments, including the THL Credit’s Logan joint venture, which we announced in December and the overall portfolio.

And Terry will take us through our financial performance in more detail. Then I will wrap up with some closing remarks. We are pleased with our financial results this quarter. Our net investment income for the quarter was $0.37 per share, compared to an ordinary dividend of $0.34 paid at the end of December.

On a cumulative basis since inception, our net investment income has exceeded our dividends paid and as of December 31, we have approximately $5.8 million of undistributed net investment income or approximately $0.17 per share.

We are pleased to announce that on March 6th, our Board of Directors approved a quarterly dividend of $0.34 per share for the first 2015, which is payable on March 31. This marks the eight consecutive quarters we have paid a $0.34 per share dividend.

The Board also approved a stock repurchase program authorizing the purchase of up to $25 million of share for one year period and I will talk more on this shortly. The overall strong performance of our portfolio together with our leverage levels continues to provide us with the reliable earnings stream to support our dividend.

A summary of our earnings and dividend history is reflected on page 15 of the Investor Presentation. As you will see, we have consistently paid a dividend that is generally in line with our earnings and we expect to continue to do so.

Additionally, you will see that we have periodically paid special dividends from equity gains, as well as from outsized earnings from more significant prepayment activity. Net assets as of December 31 were $443 million or $13.08 per share, compared to $13.29 per share on September 30, a decline of 1.6%.

Our book value overtime as represented on page 16 of our Investor Presentation reflects our history of preserving shareholder capital since inception, a modest level of retained earnings and capital raised since our IPO at prices that have been accretive to our shareholders.

The decrease in book value from Q3 is largely due to a change in unrealized depreciation in the portfolio from capital markets conditions, including the dynamics in the energy sector. Overall, spread widening in the broader market and the financial performance of certain portfolio companies.

We finished the fourth quarter with 60 portfolio investments valued at $784 million, up from $718 million at the end of Q3. For the quarter, we invested $119 million in new and follow-on transactions and realizations and repayments for the quarter were $34 million.

Total net growth in the investment portfolio for 2014 was $135 million on a fair value basis. We will as we have always done continue to approach investing with prudent and patience to seek the most attractive risk adjusted opportunities for our shareholders. Looking back on 2014, we grew modestly in Q2, shrunk in Q3 and grew notably in Q1 and Q4.

I’d like to take a minute to talk about our energy portfolio and our approach to investing in the sector. There has been a lot of discussion on energy exposure in BDC sector over the last few months as oil prices remained depressed.

As of December 31, 2014, our energy exposure was limited to three energy service companies with aggregate costs of $50 million at a fair market value of $49 million or 6% of our investment portfolio based on fair value.

The change in unrealized depreciation of our energy portfolio from the third to the fourth quarter represents approximately $0.08 per share. These investments include, Holland Services, Loadmaster and Allied Wireline.

Since inception, we have sought to be rigorous and disciplined in our underwriting approach to energy related companies with the view that the energy sector could cycle during the term of our investments.

We have invested only in the senior secured first lien loans of such companies with experienced sponsors at leverage levels, we believe appropriate for a cyclical industry. Overall, we believe our energy credits are well diversified geographically and across product and service offerings as well.

We have only invested in three energy-related companies since 2012 and have approximately 170 energy transactions evaluated with our most recent energy transaction closing just over a year ago. Despite downward pressure on BDC’s stocks collectively, we believe the fundamentals of the middle market lending environment continue to be strong.

On a macro level the financial performance of many of our portfolio companies continues to improve unless the more optimistic economic outlook with refinancing opportunities and strategic acquisition initiatives leading to more origination opportunities for us.

Before turning the call over to Chris, I want to provide you with some additional color on how we are thinking about the share repurchase program.

In times when equity market volatilities significantly impacts our stock price for sustain period of time, we believe the returns from reinvesting in our own stock may exceed the returns presented from new investment opportunities.

We have been -- while we have been thoughtful in the timing and size of our only two equity capital raises during the five year since our IPO, we believe given the recent volatility with our stock, it will be prudent to have the ability to reinvest in the existing portfolio through share repurchases.

We will weigh the timing and the extent of repurchases based on our liquidity and capital needs, our leverage levels and the performance of our stock in the market. It is important to note that the size of the repurchase program is correlated to our ability to do such under our senior secured credit facility.

Now I'll turn the call over to Chris to talk more about Q4 investments and the portfolio..

Thanks, Sam. As you can see in our press release, we deployed $119 million of capital during the quarter, including $77 million in five new investments. The first is THL Credit Logan JV or Logan, which I’ll talk about more in a moment.

We also made investments in our last unitranche loan of LAI International, the first lien note of Dodge Data & Analytics and the second lien notes of BBB Industries. Finally, we added one investment in the subordinated notes of Flagship VIII, Limited, a CLO managed by Deutsche Investment Management.

In addition to these investments, we made $42 million in investments in non-existing portfolio companies, primarily related to follow-ons and revolvers and delayed draw commitments funding growth and acquisition initiatives.

In December, as you know, we formed and announced the joint venture was an affiliate of Perspecta Trust, LLC, THL Credit Logan JV, LLC or Logan, to invest primarily in senior secured debt investments. Logan has equity commitments totaling $150 million, of which, $120 million from the BDC and Perspecta committed $30 million.

Funding such commitments will be driven part by our investment capacity overtime. As of December 31st, we had $16.8 million invested in Logan. At the end of the year, Logan had $31 million invested primarily in first lien liquid loans across 22 companies. Most of these loans settled in January 2015.

Shortly after forming Logan, $50 million credit facility was put in place with Deutsche Bank. This commitment will support the early growth of the portfolio, which will look to expand as more equity is contributed.

Initially, Logan will hold more liquid syndicated investment to build diversity and leverage within the portfolio and we expect overtime to increase the portion of directly originated loans to drive higher returns. The unlevered deals on the Logan portfolio was 6.7% as of December 31st.

As of today, Logan has invested $49 million across 37 names with an unlevered yield of 7%. Our overall portfolio remains well diversified with 72% of the portfolio in first and second lien secured floating rates debt investment across a diverse group of industries.

Subordinated debt represents 30% of the portfolio as of December 31st, another income producing securities of 6% including CLOs of 4%, equity investments of 7% and 2% invested in Logan. Weighted average yield on Q4 investments excluding Logan was 11.6.

Weighted average yield on all our income-producing investments in the portfolio as of December 31st was 11.7, up from 11.3 at the end of Q3.

Notable assets in the fourth quarter, which provided accretive fees, included repayment in full of our second lien investments in Surgery Partners, the sale of Octagon, one of our CLO equity holdings for a gain and the sale of the portion of our investment in Expert Global in BBB Industries.

Additionally, our subordinated term loan in Express Courier or ECI was repaid in full, including unpaid interest in December. The recognition of $1.2 million of the $2.2 million of total interest proceed received from ECI has been deferred until certain closing conditions have been satisfied.

As you will recall, ECI was one of our first investments to go on non-accrual back in Q2 of 2013. We were closely with an active and supported sponsor of the company through a period of financial stress over several quarters to stabilize the business and position it for a sale. Sam mentioned the credit quality of the portfolio.

I’d like to add some additional commentary in terms of credit quality and highlight recent restructured investments. As of December 31st, 82% of our portfolio, companies were on a fair value basis, received either a credit score of one or two which means they are meeting or exceeding our underwriting expectations.

As of December 31st, we had one investment with a credit score of 4 which is Dimont Associates formally a subsidiary of Wingspan. As previously mentioned in October together with our senior lenders, we led a recapitalization of Wingspan where Dimont became an independent company.

We converted all of our subordinated debt at Wingspan to a controlling equity investment in Dimont and provided approximately $4.5 million of subordinated debt capital to Dimont in connection with restructuring.

We have fully reduced the unrealized value of our equity holdings this quarter as the restructuring efforts are ongoing and remain fluid to change and unrealized depreciation negatively impacted our net asset value for the third -- for the third and fourth quarter by approximately $0.13 per share.

We will continue to work actively with Dimont management team, with the board and third-party advisors during this ongoing restructuring process. C&K Market, a restructuring investment in third quarter has improved to a 2, following its continued positive performance and stabilization since its emergence from bankruptcy in August.

We believe our controlling equity interest helps with our goal to preserve shareholder capital and provide a positive return. In terms of liquidity, we continue to use proceeds from repayments, sale of our more liquid and lower yielding names and revolver capacity to fund our investment opportunities.

Repayment and sales from December 31st were $47 million, principally from the prepayment of our subordinated debt investment at par in Country Pure Foods, a company we invested back in August 2010 and The Studer Group, an investment originally from September 2011. There were no prepayment premiums received in connection with these repayments.

The $47 million also include a proceeds from the sale of our remaining holdings in BBB Industries and a portion of our position in Charming Charlie, both at nominal gains recognize in the first quarter of 2015. Today in Q1 2015, the market has been a bit slow. We have deployed approximately $15.3 million thus far.

As of December 31, our debt to equity ratio was 0.78 times, up from 0.63 times at September 30th and 0.7 at June 30th.

This is slightly above the high end of our previously indicated range of 0.6 to 0.75, largely due to timing of some repayments in the sale settlements that closed in the early part of 2015 and some compression in the book value due to portfolio marks.

We remain confident and comfortable at our -- at the high end of our range, given our current portfolio mix of 72% of our investments in first and second lien securities, which include some more liquid investments. With that, I’ll turn the call over to Terry to talk more about our financial performance..

Thanks, Chris, and good morning, everyone. I’ll talk briefly on some additional financial highlights, but before I get into that, I would like to touch briefly on our borrowings.

Prior to Q4, we utilized solely senior debt comprised of $107 million term debt L 3.25% and a $303 million revolver at L 2.25% to finance our investing activity in a cost effective way. In November we launched an offering of unsecured notes due in 2021 otherwise known as baby bonds at a fixed rate of interest at 6.75% of which we raised $50 million.

This capital raise was a natural next step in the evolution of the right hand side of our balance sheet through diversify and extended our liabilities as we’ve grown, proceeds were use to repay outstanding amounts on our revolver. Net investment income for the quarter was $12.4 million or $0.34 -- $0.37 per share.

Net investment income for all of 2014 was $48.2 million or $1.42 per share, up from $41.4 million or $1.37 per share in 2013.

To highlight the NII drivers, we generated $24.1 million in investment income in the fourth quarter of which $20.5 million was from interest income on debt securities, including $0.6 million of PIK and $0.2 million for prepayment premiums.

We also had $2 million of interest income from other income producing securities and $0.1 million of dividend income during the quarter.

Other income included approximately $1.5 million -- other income included $1.5 million, included $0.8 million of fee income from our managed funds and accounts, and $0.7 million from what -- $0.7 million that were related primarily to commitment amendment and other administrative fees earned from our investments.

We generated $91.9 million of investment income for the year ended December 31, 2014, $83.8 million was from interest income related to debt and other income producing securities, $3.1 million was from dividend income from Yellow Pages, Surgery and AIM Media, $3 million of income of other income, principally related to our managed funds, Greenway, Greenway II and a related separate accounts, and $2 million from commitment, amendment and other administrative fees earned on our investments.

During the fourth quarter, we incurred $11.7 million of expenses, including $2.8 million in base management fees, $2.5 million in administrative, professional and other G&A expenses, $3.2 million in fees and expenses related to our credit facility and $3.2 million of incentive fees.

Professional fees during the quarter included legal and other non-recurring fees related to our recently restructured investments totaling approximately $350,000. Expenses for the year for 2014 totaled $43.7 million and included $11.1 million of base management fees and $11.2 million of incentive fees.

It also included $11.1 million related to our credit facility, $9.3 million related to administrative, professional and other G&A expenses and $1 million related to excise tax and undistributed earnings and income taxes related to consolidated blocker corporations.

During the quarter we recognized a net realized loss on our portfolio investments of $11.8 million related primarily to an $11.9 loss on the extinguishment of debt and conversion to equity of Wingspan, which is offset from a book value standpoint by the reversal of an equal amount of unrealized depreciation recorded at the end of Q3.

Losses during the quarter were offset by a modest amount of net gains primarily related to our -- the sale of our CLO residual interest in Octagon and the partial sales of BBB Industries and Expert Global Holdings. Lastly, we had net change in unrealized depreciation on our investments of $5.2 million during the quarter.

For the year unrealized depreciation increased by $2.2 million. So it was largely driven changes in financial performance of certain portfolio companies and the reversal of net unrealized depreciation of investments repaid or converted to equity in connection with debt extinguishment previously mentioned.

With that, I’ll turn the call back over to Sam for some concluding remarks..

Thanks, Terry. Overall, we are pleased with the performance of our portfolio companies and credit quality. We continue to diligently monitor our underperforming and restructured investments as we seek to preserve shareholder capital and continue to deliver stable attractive returns.

Given the state of the current equity markets, we will look to optimize our portfolio by deploying capital from repayments and sales, and new and follow-on investment opportunities, including the Logan joint venture and potential repurchases of our stock.

We remained focused on covering our dividend and providing a strong return on equity to our shareholders through attractive yields on our appropriately levered portfolio with overall strong credit quality. And we expect to continue to be prudent in managing the right-hand side of our balance sheet as we keep the shareholder’s interest front lined.

At this time, we'd like to open the line for questions, operator..

Thank you. [Operator Instructions] And our first question comes from the line of Greg Mason of KBW. Your line is now open..

Great. Good morning, guys. I wanted to dive into the Logan JV, just a little bit more in terms of your expectations for pace of deployment of the equity capital and then leverage.

And then just kind of the open return expectations and kind of timeframe for that if you wouldn’t mind framing that out for us?.

Yeah. Sure, Greg. This is Chris. We are going to be patient as we deploy capital, but it’s our expectation to grow the program as prudently as we can. As you can see, I think as we announced, we are looking at unlevered return on the assets that we are booking now at 7%.

So when you add leverage to that, that’s going to produce very attractive and in our opinion, a very attractive risk adjusted return and a strong ROE to our shareholders. So it’s a focus of ours going forward.

As the equity base increases, we will add in more direct lending type assets as well, which we think will add value not only to our shareholders but also to our clients.

If you look at the Deutsche Bank facility that we have in place, we are going to have up to two times of leverage on that and so if you do the rough math and look at our average yield in the portfolio, you’re looking around north of 12%..

What is the current cost on the DB facility?.

250, Greg, plus amount related season cost on the undrawn revolver but obviously, we are trying to get the $50 million drawn and deploy as quickly as we can..

Yeah.

And what about -- when you have origination fees with -- the syndicated loans probably haven’t had too many of them yet, but when you move into more directly originated stuff, how are the origination fees going to work in that vehicle?.

You mean like the upfront fees?.

Yeah..

Yeah. They would be split by the two partners, by us and Perspecta..

Okay. And then as we look at the ECI exit in the quarter, you said you had $2.2 million of income, some of that was deferred.

How much of that was recorded in the income this quarter versus in future quarters?.

About a $1 million, Greg of the $2.2 million, we booked in income in Q4..

And when could that other $1.2 million hit?.

It could be into latest in the 2016 timeframe, but circumstance could allow us to bring it in earlier. We will be monitoring that over the next several quarters..

Okay. Great. And then one last question and I will hop back in the queue. You gave us $15.3 million so far in Q1.

What are your repayments that you have seen or are coming shortly in Q1?.

Yeah. We had -- I think when Chris mentioned the $47 million today has comeback, one of the largely Studer and Country Pure. We also sold a little bit of Charming Charlie and some additional BBB..

Got it..

Net both 30 today negative..

And I think you said, no major prepayment income or one-time items with Studer or those other repayments, is that correct?.

They were none. No, correct..

Okay. Great. Thank you, guys..

You bet. Thanks, Greg..

Thank you. And our next question comes from the line of Doug Mewhirter of SunTrust. Your line is now open..

Hi, good morning. Actually, Greg snagged my repayment question, but I guess I will maybe step it up a little higher.

So it sounds like with your leverage levels -- you are sort of content right now to sort of recycle your portfolio, add some incremental assets to your joint venture and possibly maybe use whatever is leftover to buyback stock as long it’s below net asset value, is that sort of the way you are looking at the portfolio right now?.

Yeah. Doug, its Sam. That’s -- I think, it’s a fair revenue how we are looking at it. In any particular quarter, we seem to get a lower base of $35 million higher. I think close to $70 million of repayment. So that’s a source of capital. We’ve got maybe a little bit room today under the revolver. We will keep it at our target leverage level.

And we’ve got about $70 million of what we’ve characterize as liquid loans that we could sell. So there’s a few sources of liquidity to do new transactions as well as investment of Logan JV. And if we see the opportunity in our stock to repurchase of stock, we think it’s an attractive price, we may use some capital do that as well..

Great. And could you speak to the overall, I guess, the qualitative environment for investing. I know there has been some volatility. I know most of volatility has been on a more liquid side.

But in terms of, as you are sourcing deals, is there a sort of a hesitancy to close deals or maybe has some of the power shifted to the lender from the borrower now just because of the disruption?.

Doug, this is Chris. I wouldn’t say there is hesitancy on our part. I think we’ve shown since we’ve been public that when we see value and an attractive term where we’ll put assets out the door when we don’t, we’ll be [Technical Difficulty].

So in this environment, we didn’t see much attractive opportunities [Technical Difficulty] you saw the portfolio contract [Technical Difficulty] in Q4 when we saw much more attractive opportunities it grew. That’s going to be the style [Technical Difficulty] to invest on time.

Market conditions, I’d say are -- we are looking -- we have five of them in countries so we have [Technical Difficulty] which allows this to be selective. That’s the key cornerstone of us. It’s a -- a lot of different things to look at. We were able to break [Technical Difficulty] if you will..

Okay. Great. Thanks. That’s all my questions..

Thank you. And our next question comes from the line of Chris York of JMP Securities. Your line is now open..

Good morning.

Doug, took my question, but I did want to get a follow-up a little bit on the new yields for that $15 million new investment in Q1?.

Yeah. Chris, this is Terry. Thanks. We -- it was about 10.5 % on the debt component that went in and it was an additional contribution to the joint venture as well so..

Got it. That’s it for me. Thanks..

Thank you. And our next question comes from the line of Jonathan Bock of Wells Fargo Securities. Your line is now open..

Good morning and thank you for taking my questions. Gentlemen, a question as it relates to stock buyback, and please forgive me if I have the definitions incorrect.

But I see there is not a 10b5-1 plan, is that correct?.

That’s correct, Jon..

So can you give us a sense as to the windows of opportunity that you have available to purchase stock because I understand it’s fairly restrictive.

So would you be able to give us some color on when you are actually able to do so?.

Yeah. At this point, I abstain putting in place the 10b5, which is not in place today Jon. We are pretty limited in the windows and those are -- those today are the windows that we as insiders are subject too.

So it would be a pretty short window for this quarter, typically ends about 15 or a quarter closes up, and that opens two days after a quarter -- quarterly results were announced.

So if we think of the next window, notable window that will open up for a period of time, it’s the like early may time frame after we do our earnings call to about mid-June would be the first big window we had.

And again during those windows, we would evaluate several factors as Sam outline that were liquidity and quite frankly where our stock is trading as we thought about repurchases during those times..

Okay. So would it be your intention to move towards the 10b5-1 in order to limit the restrictive nature of -- and I think you mentioned, Terry, I mean I was always in a depression it was two weeks after the reported quarter like for example this one but you are saying its actually in the May timeframe is when you are able to do it.

So would it be your intention to move towards more of an algorithmic set, where you just purchase at a set price below NAV?.

Hey Jon, it’s Sam. I’ll jump in here. Actually, there is something that we are continuing to discuss with our Board of Directors. We just had our meeting last week. We’ve got the share repurchased approved. And it’s something that we’ll continue to discuss internally with our management team and with our Board..

Okay. Great. I know it’s -- people appreciate the algorithmic nature of things, just because it takes all the difficulty of the table when the stock is in unattractive level. The next item is, you noticed and want to understand the ability to diversify the liabilities.

Give us a sense of how you’re looking at NOI accretion here if we think about those at roughly 6.75% cost and then layer on expenses on top of that, getting well under the mid 9s in terms of cost relative to what one is deploying at.

Would you consider that marginally accretive from an NOI perspective, not accretive at this point in the cycle where spreads are tight at times and people are -- where you can walk through decision, why now -- why that time was a perfect point to diversify liabilities, just given that there is limited NOI growth from the fact that you’re already at fairly high leverage levels?.

Yeah. It’s a fair question, Jon. I appreciate it. I think the way we look at raising the unsecured debt is a lot more holistic in terms of thinking about business. So we’re at point in time for our stock in many BDCs, the equity markets are pretty much locked up.

So at what point in time, do you start to, for lack of a better word, strengthen, diversify, extend the right hand side of your balance sheet. So that in an environment, where an equity raise isn’t prudent, you’re also doing things to diversify yourself away from reliance on senior lenders completely.

So I think from a -- it was as much a business decision as anything. And I think locking in a fixed rate over seven years, in an environment, where we think rates will rise is quite frankly a pretty small piece of the overall capital structure and a good play on our future rate increased environment..

Okay..

As you think about just -- we don’t think about the 6.75% yield specific to an investment. We think about again all of our liabilities and all of our assets holistically in terms of generating ROE. And while I will tell you that it’s the $50 million of that rate, squeezes NII probably about a little less than a penny a quarter.

I think at the end of the day from the business -- it's good from a business perspective to have a more what I’ll call fortress balance sheet of diversified liabilities..

Yeah. Appreciate that. And then pardon me, if I missed this just because I think you said you had roughly $70 million of, we’ll call it liquid securities that you could liquidate and redeploy and maybe they were just ringing on one of the previous questions.

What was the amount of what you’d consider investable capacity that you would have beyond that $70 million of liquid securities?.

Yeah. First on the -- the term liquid securities, you need to think about liquidity in the middle market as kind of a spectrum, right. So that $70 million is what we’ve identified would be readily saleable..

Okay..

It’s possible that we would take a little bit longer push. Certainly there would be more securities that we could sell. In terms of capacity, I think we are currently in $25 million, $30 million that we could drawdown on the revolver but still remain within our target leverage range..

Great. And then, Sam, the last question for the JV and I apologize if I missed it. I understand that you will get long-term Deutsche as you build the portfolio.

At what size does the portfolio of syndicated loan need to be before you are able to draw?.

John, this is Chris. We are actually utilizing the leverage today. If you look, it’s a -- what do we have now? We have $49 million of investments made today then there is only $20 million of equity capital invested..

Perfect. Okay. Great..

Part of it is due to -- as you look through to that, one of the reasons as we structured the program out of the box as we did, maintaining that leverage or having access to that leverage diversification was critical. So, we don’t have a negative drag on the equity contribution we made to the joint venture.

We want to have a double-digit type ROE as quickly as we can. I think we’ve been able to achieve that by building the portfolio slightly more liquid loans out of the box versus the longer term goal of doing more directly originated assets once that equity base increases..

Great. All right, guys. Well, thank you very much and congrats on the stock buyback. That’s excellent news, so thank you..

Appreciate it, Jon..

Thank you. [Operator Instructions] And our next question comes from line of Greg Mason of KBW. Your line is now open..

Great, guys. Just a few follow-up questions here. Wanted to see if you could tell us a little bit about Tristar Management, I know that’s been down from 99% to 90% last quarter and now 86% of costs. I can’t really find much information about it. Just want to know if you can give us a little some color on Tristar..

Yeah. Greg, this is Chris. It’s obviously is a portfolio company that we are focused on. We don’t want to go into too much detail at this stage because it’s obviously is a privately held business.

We’d probably just highlight that the -- there is a couple of situations that we are in the process of working through and we felt, given the uncertainty of that, it created a situation where we should reflect that in a more. We’ll have more -- we are going to have more color hopefully in the near term.

If you look at the business itself, it’s an asset light logistics company. It’s a very attractive company that we think long-term has good prospects but we are in the near-term working through potential issues, hence the reason why it’s reflected in a slight knock on the market..

We couldn’t really find a website on it.

Could you just kind of tell us what they do? I know you said logistics company but….?.

So as you think about the bulk of the business, it’s a -- they run the brains, if you will, of these large warehouses that do pick and packs both in Canada and U.S. So if you walk through like a Sam’s Club warehouse, they may have like a million square foot facility and we don’t own the assets inside of it. We own the software and the systems.

So products will come in and they will get shelved and then when store needs to be refurbished, we have machines and very few people would go on and grab that pick and deliver to the store..

Okay. Great.

And then of the kind of $0.23 write-down in book value due to realized and unrealized marks, how much of that would you characterize as just mark-to-market versus credit impact in this quarter?.

The short answer is -- it's about 50-50..

Okay. Great. And then one last question.

I think we saw in SEC filing in February for a Credit Direct Fund III, is that essentially a Greenway Fund III, does that impact the BDC at all?.

It won’t impact the BDC. It’s a similar to the Greenway vehicle as noted in the filing. It would be managed directly by the advisor..

Okay. Got it. All right. Thank you, guys. Appreciate it..

Thanks, Greg..

Thank you. And I’m showing no further questions at this time. I would like to turn the conference back over to Mr. Tillinghast for any further remarks..

Thank you everyone. Well, we appreciate the questions and look forward to speaking with you next quarter..

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude today’s program and you may all disconnect. Have a great day, everyone..